Monthly Archives: July 2012

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Implementation of Lord Justice Jackson’s costs forms continues to gather pace. The Court of Appeal has implemented (somewhat by the back door) Jackson LJ’s proposal for a 10% increase in general damages (too partially compensate claimants for losing recoverability of success fees and ATE premiums) in its recent judgement in Simmons v Castle [2012] EWCA Civ 1039. This will apply to all cases where judgement is given after 1 April 2013. This does beg the question as to whether claimant solicitors, particularly in high value claims, would be negligent to settle claims prior to that date. Conversely, defendants have a reasonably large incentive to settle claims prior to that date and make offers that will afford them sufficient protection. Will the issue therefore arise as to whether, when a court is determining whether a Part 36 offer has been successful, it will have to take into account the date the offer was made (ie a Part 36 of £10,000 made before 1 April 2013 will be worth more than a judgment of £10,999 made after 1 April 2013, assuming the offer is for general damages only).

Further, in so far as the increase in damages was supposed to compensate the claimant for having to pay his own success fee and ATE premium, the additional liabilities will only be irrecoverable for cases where the CFA/ATE is entered into 1 April 2013, whereas damages will increase for all judgments after that date. There will therefore be many claims where defendants are paying out an extra 10% in general damages despite also having to meet the claimant’s success fee and ATE premium in full. This is one of the problems created by a significant change such as this being brought in by the back door of judicial intervention rather than through proper statute with carefully drafted transitional provisions.

The government has also continued to reiterate its determination to extend the RTA portal upwards and outwards in April 2013, despite various concerns and misgivings from certain quarters.

The government has also announced plans to introduce a new streamlined claims process for mesothelioma claims. Details are extremely vague at this stage but this will also apparently address “the civil litigation costs for all mesothelioma claims, to reflect the faster claims process and in line with the government’s wider reforms”. This is almost certainly shorthand for some sort of fixed fees that are considerably less than the amounts currently allowed.

The Ministry of Justice has also announced that the Jackson Reforms will be reviewed after three years. This may make you wonder (worry) as to what they may have in mind if they conclude that these refroms have not exerted a sufficiently downward pressure on legal costs.

One of the inherent difficulties when advising defendants in relation to cost disputes is the difficult question of determining which points are worth taking and which ones are not. One costs judge’s technical dispute wholly lacking in merit is another costs judges perfectly proper challenge that will meet with success. For example, where there has been a failure to serve the proper statements/risk assessments in support of a success fee or a fully compliant ATE certificate, some costs judges will happily grant relief from sanctions even where the application is not made until the middle of the detailed assessment hearing itself, and only made orally without any evidence in support (notwithstanding the fact the dispute was raised many months in advance); whereas other costs judges will invariably disallow the additional liabilities in the absence of an early formal application properly supported by evidence.

The unpredictability of the process is made worse by the equally unpredictable approach adopted by opponents. Although it comes as no surprise when they fail to make any concessions to disputes raised, sometimes regardless of the strength of the dispute, there are others who will make voluntary concessions that certainly go way beyond what it is probable a court will disallow, even if not impossible.

The difficulty is therefore whether to plead every available point, regardless of how speculative in nature, on the off-chance that it might possibly be successful, or whether to limit one’s disputes to those that are most likely to succeed. The former approach runs the risk of escalating the detailed assessment costs, and annoying some costs judges; the latter approach runs the risk that potential costs savings are not maximised.

Obviously, in large part this comes down to a question of judgement based on experience. But, again, the difficulty is that experience shows the inherent unpredictability of the whole process.

Neil Rose, the Editor of Costs Lawyer magazine, has recently launched the Litigation Futures website. This is a spin-off of his excellent Legal Futures website and provides the latest news in relation to costs and funding.

This is an absolutely invaluable resource. Not only is Neil invariably the first to break any news relating to developments in this area but his detailed knowledge of these issues means that his reporting is invariably 100% accurate (unlike certain legal publications that could be mentioned).

The Association of Costs Lawyers new website (www.associationofcostslawyers.co.uk) is well worth a visit for those who have not yet seen it (and not simply to see a video presentation by Chairman Iain Stark – as if that weren’t enough) but also to see the sample copies of the excellent Costs Lawyer magazine. Although this is one of the great perks of ACL membership, it is surely only a question of time before this publication is made available for purchase by non-Costs Lawyers.

The other day I suggested that there must be an error in the statement made by justice minister Jonathan Djanogly concerning implementation of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 and how Part 36 would operate.

It has now been confirmed that there was indeed an error in the statement and the correct position is:

“There is to be an additional amount to be paid by a defendant who does not accept a claimant’s offer to settle where the court gives judgment for the claimant that is at least as advantageous as an offer the claimant made to settle the claim. This additional sanction is to be calculated as 10% of damages where damages are in issue, and 10% of costs for non-damages claims”

Civil Procedure Rules n. a set of rules set in stone and designed to provide certainty in the operation of the civil justice system, applied inconsistently and unpredictably by the courts. Currently in its 58th version. If the Ten Commandments had undergone changes and additions at the same pace, the Forty-fourth-thousand-third-hundred and Eleventh Commandment would be concerned with the size of marmite jars.

This is particularly helpful for those Costs Judges who have the old court rooms as the court room numbers do not correspond with the floor numbers. Hopefully this will save some of you a few frantic minutes running round the corridors or up and down in the lift.

“It would be positively dangerous for me to seek to give any sort of specific or detailed guidance in a lecture before the new rule has come into force and been applied. Any question relating to proportionality and any question relating to costs is each very case-sensitive, and when the two questions come together, that is all the more true. The law on proportionate costs will have to be developed on a case by case basis. This may mean a degree of satellite litigation while the courts work out the law, but we should be ready for that, and I hope it will involve relatively few cases.”

This approach is difficult to understand. Self-evidently, no two cases are alike. However, the vast majority of litigation is routine in nature (even if relatively complex on occasions) and does not involve unusual factors that take the claims outside the usual (ie where it is not test litigation and there are no reputational or public importance issues arising). Therefore the answer to the question of what level of costs is it proportionate to incur to recover £25,000 should not normally require consideration of any special fact specific issue. (Consideration of what work was “reasonably” incurred is, of course, case specific but applying the Jackson test: “proportionality should prevail over reasonableness”. Therefore, discovering what work was reasonably incurred on an individual case does not tell us what is proportionate.) Indeed, it is difficult to see why the answer to the issue of what is a proportionate level of costs to recover £25,000 should normally vary from case-to-case.

On the other hand, if the amount of costs it is proportionate to incur to recover £25,000 is indeed to vary in every single case, it is difficult to see what useful guidance the courts are ever going to be able to give and the idea the “satellite litigation” on the issue will be limited is, at best, wishful thinking.

“There is to be an additional sanction to be paid where judgment for the claimant is more advantageous than a defendant’s part 36 offer. This additional sanction is to be calculated as 10% of damages where damages are in issue, and 10% of costs for non-damages claims”.

This is almost the exact opposite of what Lord Justice Jackson proposed:

“Where a defendant rejects a claimant’s offer, but fails to do better at trial, the claimant’s recovery should be enhanced by 10%.”

I am currently proceeding on the basis that the minister’s statement contains an obvious error. The alternative is too bizarre to consider. (Remember, Part 36 will apply to costs proceedings come April 2013.)

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